Long-anticipated changes to privacy regulation in Australia have
today been passed by both Houses of Parliament and are now only
awaiting Royal Assent to become law.

The Privacy Amendment (Enhancing Privacy Protection) Bill
2012 (the Privacy Bill) contains substantial amendments to the
Privacy Act 1988 (Privacy Act). Amendments include
introducing a new set of Australian Privacy Principles (APPs),
replacing current credit reporting provisions, and strengthening
the investigative and regulatory powers of the Australian
Information Commissioner.

Entities that collect or hold information in Australia will need
to change their practices to comply with the Privacy Bill before
its commencement in 15 months' time. Organisations affected by
the changes will need to act promptly in amending their systems and
procedures to meet this deadline.

Important changes to the collection and handling of personal
information

The new APPs replace the existing National Privacy Principles
and Information Privacy Principles (existing Principles), governing
the collection, use, disclosure and maintenance of personal
information by both public and private sector organisations. Among
the important changes from the existing Principles are:

APP 1 – Open and transparent management of
personal information

APP 1 contains new obligations regarding data transparency, and
specifies the information that must be included by organisations in
their privacy policies. Organisations will need to specify how an
individual can make a complaint about a breach of their privacy,
whether the organisation is likely to disclose information
overseas, and (if practicable) the locations in which personal
information is likely to be held or disclosed. Organisations will
also need to ensure that their privacy policy is permanently
available to the public (typically by posting it to their
website).

APP 4 – Dealing with unsolicited
information

APP 4 regulates the receipt of information by organisations,
requiring organisations to determine whether the information they
receive from a third party could have been collected by them under
APP 3. Information that does not meet these standards will
generally need to be destroyed or de-identified.

APP 5 – Notification of the collection of
personal information

Existing notification requirements to individuals upon
collection of their personal information will be expanded, with
organisations required to disclose the circumstances in which they
collected the information if not directly from the individual,
whether they are likely to disclose the information overseas, and
(if practicable) the location of any likely overseas
disclosure.

APP 8 – Cross-border disclosure of personal
information

Under APP 8, before organisations may disclose personal
information overseas, they must take reasonable steps to ensure
that the recipient of the information does not breach the APPs.
Importantly, although organisations that meet this requirement will
be permitted to disclose information lawfully, they may still be
held liable for any breach of the APPs by the recipient and be
penalised. This includes situations where they have received a
contractual assurance from the recipient that they will treat the
information in accordance with the APPs. Organisations can escape
liability for the acts of recipients if:

the organisation reasonably believes that the recipient is
subject to laws in its country that protect the information in a
substantially similar way to the APPs, and that an individual
affected by a breach is able to access that justice system (this
may be a difficult threshold to meet)

the organisation expressly informs the individual that their
information will be disclosed overseas, and the individual consents
to that disclosure in the knowledge that the organisation will not
be held liable for any breaches

the disclosure is required by law, or a "permitted general
situation" applies.

These changes are significant for organisations that currently
rely on the exceptions in the Privacy Act permitting overseas
disclosures that are subject to a contract – organisations
will still be permitted to disclose information in this situation,
but may find themselves held liable for breaches outside their
control. They also raise the standard of consent required from
individuals, meaning that organisations that have relied on
individuals' consent may need to review and re-write their
consent clauses and options to be protected from sanction under the
Privacy Act.

Important changes to powers of the Australian Privacy
Commissioner

The amendments also vest additional powers in the Australian
Privacy Commissioner. The most important of these is the power to
apply to the Federal Magistrates Court or Federal Court of
Australia for a penalty of up to A$1.7 million in respect of a
corporation where the Australian Privacy Commissioner alleges that
the corporation has breached a civil penalty provision. This
includes engaging in an act or practice that is a
"serious" or repeated interference with an
individual's privacy, or breach of credit reporting provisions.
The Australian Privacy Commissioner is also empowered to accept
written undertakings from entities, and to apply to a Court to
enforce these or to order that compensation be paid.

The Australian Privacy Commissioner's powers of
investigation have also been strengthened, with the Australian
Privacy Commissioner now empowered to conduct own motion
investigations regarding a possible breach of any of the APPs ie
without a complaint having been made.

Important changes to collection and disclosure of credit
information

The Privacy Bill contains a complete overhaul of the law
regulating the collection, use and disclosure of information
regarding the credit histories and credit ratings of customers. It
permits organisations and credit reporting agencies to collect not
only "negative" information that they have been able to
collect until now (such as a customer's current credit
providers, default history and prior credit applications), but also
"positive" credit information. This includes more
comprehensive information such as the dates on which credit
accounts were opened and closed, current credit limits, and
repayment history information. These changes will allow
organisations to more comprehensively judge the credit-worthiness
of customers. However, organisations will need to review their
existing processes and be vigilant about the disclosure of credit
information, as there are a range of restrictions which will be
placed on the use and disclosure of credit information (including
as to its use or disclosure overseas).

Our teams have a wealth of experience assisting organisations
with respect to their privacy obligations. Please contact us if you
want to discuss these implications further.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

Middletons has been awarded a 2012 EOWA Employer of Choice for
Women citation acknowledging our commitment to workplace
diversity.

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Privacy law reform introduces a new regime governing the reporting of payment defaults to Credit Reporting Bodies.

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